Research: Rating Action: Moody’s affirms the ratings of 12 Japanese government-related issuers; outlooks stable




NOTE: On March 25, 2022, the press release was corrected as follows: The following disclosure was added as the eighth paragraph of the Regulatory Disclosures section: “At least one ESG consideration was material to the credit rating action(s) announced and described above.” Revised release follows.

Tokyo, March 25, 2022 — Moody’s Japan K.K. has affirmed the A1 ratings of 12 Japanese government-related issuers (GRIs). The outlooks on the ratings remain stable.

The 12 GRIs are:

Central Nippon Expressway Company Limited

East Nippon Expressway Company Limited

Japan Bank for International Cooperation

Japan Expressway Holding and Debt Repayment Agency

Japan Finance Corporation

Japan Finance Organization for Municipalities

Japan Housing Finance Agency

Japan Railway Construction, Transport and Technology Agency

Metropolitan Expressway Company Limited

New Kansai International Airport Company, Ltd.

Urban Renaissance Agency

West Nippon Expressway Company Limited

A list of all affected ratings can be found at the end of this press release.

RATINGS RATIONALE

The affirmation of the ratings and maintaining stable outlooks at the same level as the sovereign rating of Government of Japan (A1 stable) reflect the very strong links between the government and the GRIs.

Moody’s assesses that the creditworthiness of the GRIs mirrors that of the sovereign given the important policy role of the GRIs, the continued high level of credit support from the government and the heavy involvement of the government in their operations. As such, the strength of governance of the sovereign, as supervisor of the GRIs, and of the GRIs themselves supports the tight linkages, and the GRI ratings being the same as the sovereign rating.

Moody’s uses a rating approach without assigning a Baseline Credit Assessment, as the rating agency considers these GRIs to be essentially operating arms of the government, given the high level of integration of their businesses with the government policy.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

Environmental risks are not material to GRIs’ ratings, given the strategic role and the strong linkage with the Japanese central government. The country’s environmental considerations include its exposure to natural disasters, which have disrupted economic activity and necessitated high fiscal costs for reconstruction.

Social risks are not material to GRIs’ ratings, given their strategic role and strong linkage with the central government. The country’s social considerations include the aging and shrinking domestic working-age population weighing on potential growth.

Governance risks are material to GRIs’ ratings. The GRIs’ governance is intrinsically intertwined with the central government under a sound governance framework, which provides strong supervision and ultimately makes key decisions.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

An upgrade of the GRIs’ ratings would require an upgrade of the Government of Japan’s sovereign rating. Conversely, a downgrade of the Government of Japan’s sovereign rating would lead to a downgrade of the GRIs’ ratings. In addition, a decline in government/regional and local governments’ ownership or an institutional change that would result in lower financial support or weaken the GRIs’ very close relationship with the central government could lead to downward pressure.

The principal methodology used in these ratings was Government-Related Issuers Methodology (Japanese) published in February 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1186222. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Affected Issuers and Ratings:

Central Nippon Expressway Company Limited

… Issuer Rating (Local Currency), Affirmed A1

… Backed Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Secured Shelf (Local Currency), Affirmed (P)A1

… Backed Senior Unsecured Medium-Term Note Program (Local Currency), Affirmed (P)A1

… Backed Senior Unsecured Regular Bond/Debenture (Foreign Currency), Affirmed A1

… Outlook, Remains Stable

East Nippon Expressway Company Limited

… Issuer Rating (Foreign Currency), Affirmed A1

… Issuer Rating (Local Currency), Affirmed A1

… Backed Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Secured Shelf (Local Currency), Affirmed (P)A1

… Outlook, Remains Stable

Japan Bank for International Cooperation

… Issuer Rating (Foreign Currency), Affirmed A1

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1 *including assumed debt issued by Japan Bank for International Cooper. (Old)

… Backed Senior Unsecured Regular Bond/Debenture (Foreign Currency), Affirmed A1

… Outlook, Remains Stable

Japan Expressway Holding and Debt Repayment Agency

… Issuer Rating (Foreign Currency), Affirmed A1

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1 *including assumed debts issued by Japan Highway Public Corp. and Hanshin Expressway Public Corporation

… Backed Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Outlook, Remains Stable

Japan Finance Corporation

… Issuer Rating (Foreign Currency), Affirmed A1

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Secured Shelf (Local Currency), Affirmed (P)A1

… Outlook, Remains Stable

Japan Finance Organization for Municipalities

… Issuer Rating (Foreign Currency), Affirmed A1

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Backed Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Unsecured Medium-Term Note Program (Local Currency), Affirmed (P)A1

… Senior Unsecured Regular Bond/Debenture (Foreign Currency), Affirmed A1

… Outlook, Remains Stable

Japan Housing Finance Agency

… Issuer Rating (Local Currency), Affirmed A1

… Outlook, Remains Stable

Japan Railway Construction, Transport and Technology Agency

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Outlook, Remains Stable

Metropolitan Expressway Company Limited

… Issuer Rating (Local Currency), Affirmed A1

… Backed Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Secured Shelf (Local Currency), Affirmed (P)A1

… Outlook, Remains Stable

New Kansai International Airport Company, Ltd.

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Secured Shelf (Local Currency), Affirmed (P)A1

… Outlook, Remains Stable

Kansai International Airport Land Co., Ltd.

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Outlook, Remains Stable

Urban Renaissance Agency

… Issuer Rating (Local Currency), Affirmed A1

… Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Outlook, Remains Stable

West Nippon Expressway Company Limited

… Issuer Rating (Local Currency), Affirmed A1

… Backed Senior Secured Regular Bond/Debenture (Local Currency), Affirmed A1

… Senior Secured Shelf (Local Currency), Affirmed (P)A1

… Outlook, Remains Stable

Central Nippon Expressway Company Limited, headquartered in Aichi Prefecture, is wholly owned by the Japanese government.

East Nippon Expressway Company Limited, headquartered in Tokyo, is wholly owned by the Japanese government.

Japan Bank for International Cooperation, headquartered in Tokyo, is wholly owned by the Japanese government.

Japan Expressway Holding and Debt Repayment Agency, headquartered in Kanagawa Prefecture, is wholly owned by the Japanese government, and regional and local governments.

Japan Finance Corporation, headquartered in Tokyo, is wholly owned by the Japanese government.

Japan Finance Organization for Municipalities, headquartered in Tokyo, is wholly owned by the regional and local governments.

Japan Housing Finance Agency, headquartered in Tokyo, is wholly owned by the Japanese government.

Japan Railway Construction, Transport and Technology Agency, headquartered in Kanagawa Prefecture, is wholly owned by the Japanese government.

Metropolitan Expressway Company Limited, headquartered in Tokyo, is wholly owned by the Japanese government, and regional and local governments.

New Kansai International Airport Company, Ltd., headquartered in Osaka Prefecture, is wholly owned by the Japanese government.

Urban Renaissance Agency, headquartered in Kanagawa Prefecture, is wholly owned by the Japanese government, and regional and local governments.

West Nippon Expressway Company Limited, headquartered in Osaka Prefecture, is wholly owned by the Japanese government.

REGULATORY DISCLOSURES

For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.

At least one ESG consideration was material to the credit rating action(s) announced and described above.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.


Hiroe Yamamoto
Analyst
Sub-Sovereign Group
Moody’s Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo, 105-6220
Japan
JOURNALISTS: 81 3 5408 4110
Client Service: 81 3 5408 4100

Marie Diron
MD – Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody’s Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo, 105-6220
Japan
JOURNALISTS: 81 3 5408 4110
Client Service: 81 3 5408 4100

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